Out of the 40 cities where Google offers is currently available, customers in 23 of these now get offers from the company's partners in addition to Google's own offers.

In its announcement, Google explicitly acknowledges that in order to bring its users the best deals, it needs to work with partners. At the same time, though, it's also clear that these smaller niche sites need bigger partners to have any chance in succeeding in a market that is dominated by Groupon and LivingSocial.

Maybe the most interesting of these new partners is Signpost (which, it is worth noting, is partly funded by Google Ventures). The company sets up online stores for small businesses and also works with its customers to set up daily deal campaigns.

Last year, Google Offers, the company's Groupon clone, launched a program in New York City and San Francisco that brought deals from third-party daily-deals services like Gilt City, Dealster, Eversave and others to the service. Today, Google is expanding this program to Boston, Los Angeles, Long Beach, Washington, D.C. and Groupon's hometown of Chicago. To enable this expanded deal aggregation, Google is partnering with three new deal providers as well. Google will now feature deals from CrowdSavings, SpaRahRah! and LocalWineEvents.com in its daily emails and on its site.

Given that the company now offers a wider range of deals in these cities, it will also allow its users there to take its personalization quiz. This ensures that those who can't get enough deals on massages can continue to get those offers and those who prefer not to get yet another offer for an aromatherapy session can make sure they get other offers instead.

Google is clearly positioning Google Offers as more of a platform for third-party services and using its personalization service as a way to increase the conversion rates for these deals. The service is currently available in 38 cities and chances are that Google will continue to add more cities to its deal aggregation service over time.

An End to Irrelevant Deals

In addition, Google is also adding some personalization features to Offers. After taking a short quiz (asking you if you want to get offers related to pets, for example), you will never have to see another offer for a portrait session or glass blowing class from Google Offers again. Google Offers is currently available in 17 cities.

Indeed, the fact that most of the offers I’ve been receiving lately have been completely irrelevant to me (really? another massage with aromatherapy?) has made me unsubscribe from quite a few deals services lately. Adding personalization – especially now that Google is working with more partners – simply makes sense and may just make daily deals a bit more relevant to many users as well.

Are Daily Deals Slowly Fizzling Out?

Overall, it feels as if the daily deals market is slowly contracting as the novelty wears off and users start to get tired of the daily barrage of emails with offers for cheap yoga sessions, weight-loss packages, mattresses and pizza (that’s the last five days of LivingSocial deals in my area right there). Maybe by targeting offers a bit better than others, Google can reverse this trend for a while, but I doubt we will ever see a return of the Groupon mania of early 2011.

Daily deals weren’t much of a category two years ago and the oversaturation of the market today threatens to push it back into obscurity once more. One of the reasons why many vendors are tired of Groupon, LivingSocial and similar programs is that they don’t actually generate a lot of repeat business. Consumers just move on to the next deal instead. Microsoft wants to change this. As part of the full launch of its Bing Deals daily deals aggregation service today, the company is also rolling out a loyalty program called the Microsoft Punchard Program. The new Bing Deals will also allow merchants to offer their own deals directly through Bing.

Turning Deal Hunters into Loyal Customers

According to Microsoft’s director for its Microsoft Advertising division, “deals will no longer be a one-time engagement, but rather, the Microsoft Punchcard Program will integrate a loyalty program tied to the deal that gets better with more engagement.” The idea here is that the deal – if managed through Bing’s Business Portal – will actually get better as you go back to the merchant. I’ve asked Microsoft for some clarification on how this program will work from a customer’s perspective and will update this post once I hear more.

Accelerated Deals

Bing is also giving merchants the ability to bring some of the original “group buying” spirit of the daily deals business. With its new “accelerated deals,” local stores can set up deals that become more valuable once a certain threshold of customers has bought a coupon.

In addition to all of this, Bing is also introducing the ability for local merchants to offer deals “in partnership with local schools with a percentage of the proceeds going towards schools’ fund-raising efforts.”

This new program is scheduled to roll out in 12 cities across the U.S. in the near future. Those cities and regions are: Atlanta, Austin, Boston, Chicago, Dallas Fort Worth, Honolulu, Los Angeles, New York, San Diego, San Francisco, Seattle and Southern Oregon (Southern Oregon being the odd one out here, given that’s it’s not exactly a metropolitan area, but Microsoft plans to test the fund-raising aspect of this new program there).

Internet users will be able to find these deals when they search or look for deals on Bing.

When it comes to the daily deals market, there are now dozens of companies consumers can choose from, but at the end of the day, the two largest and most important ones remain Groupon and LivingSocial. I’ve long had the feeling that the two companies attract very different audiences and a new study by comScore now provides some data that validates this hunch. (more…)

Groupon today launched the newest addition to its group buying site: Groupon Getaways – a travel-focused deals site that’s powered by Expedia. There are, of course, already a number of similar sites on the market, with LivingSocial Escapes being one of the market leaders.

Thanks to its partnership with Expedia, though, Groupon will be in an extremely advantageous position to rival all of the other sites that took the basic Groupon model and applied it to travel before Groupon itself got a chance to do so.

Take this recent LivingSocial Escapes deal for a hotel in Mexico, for example. It’s a good deal and I’m sure LivingSocial will make some money off it, but given that nobody is going to drive to Cabo San Lucas, LivingSocial won’t make a dime of the travel arrangements that its users make to actually make use of this deal. Groupon and Expedia, on the other hand, can offer users a full-service travel service that doesn’t just include the deal, but also transportation to the location and tickets for local events and sights. Besides the money Groupon makes on selling these deals then, it could also get affiliate fees for when its users book their flights, for example.

In a post on his blog Venture Level today, entrepreneur Romil Patel describes his experiences with running Groupon and LivingSocial deals. Overall, his experience with Groupon was not exactly positive, but what struck me while reading his account was that the Groupon representative he worked with asked him to create positive Yelp reviews for his own business.

Here is the relevant part from the post:

“Later on, after the terms were accepted by me, my rep emails me and asks me to create Yelp reviews for my QSR [quick service restaurant], by having either my employees write how good my QSR is or having my “best” customers write them. I’m not too sure, but I’m confident this has to be against Yelp’s terms of service since this would be considered creating fake and biased reviews. Needless to say- I thought this was an ethics issue, and I didn’t do it.”

Indeed, self-reviews are obviously against Yelp’s terms of service and rather unethical. It is striking that a Groupon representative would ask merchants to do this in the first place. Groupon often features excerpts from positive Yelp reviews when it advertises deals and this behavior immediately renders all of these reviews suspect.

It is hard to say if this is something other Groupon representatives do as well, or if this representative just went rogue. As Patel himself notes, maybe the Groupon representative he dealt with was just not up to par (he had numerous other issues with him as well).

I have asked Groupon for a statement and will update this post once I hear back.

Update (4/22 12:40pm PT): A Groupon spokesperson responded with the following statement:

“We never ask merchants to falsify online reviews with those from their best customers or employees. We do use sites like Yelp and Citysearch to provide credible third-party reviews of the merchants we feature; if a merchant doesn’t have any, it’s difficult for us to run them because our customers expect that third-party approval. We will note this to the merchant and encourage them to ask *all* customers to post Yelp reviews, positive or negative. We’re much more likely to run a deal when we know our subscribers can make an educated purchase.“

The good folks over at ClickZ just posted a story with the following headline: “Google’s Version of Groupon is Live: How it Works.” Problem is, that is simply not true. The image in the article – reproduced below – is from the Google Places interface which has allowed vendors to offer coupons for a long time now. This tab used to be called “Coupons” at one point in the past.

Update: A friend pointed me to places.google.com/offers, a URL mentioned in the ClickZ article that includes the following text:

“If you want to create a Google Offer today on your Google Places listing, you can either login to your existing Google Places account and click on the Offers tab. In addition, to learn how to create a Google Places listing please start here.”

As far as I can see (and I have a Google Places account), the Places interface makes no mention of daily deals-like offers yet. Instead, this is currently just the standard interface for creating printable and mobile coupons. Given this landing page, though, the company is clearly gearing up to launch Google Offers soon.

It is also worth noting that the material that Google sent out to a few select merchant did not point to a self-serve operation like the current coupon-creation system on Google Places. Instead, Google plans a full service Groupon-like setup where Google’s “writing team will craft a compelling write-up for you offer” and guide merchants through the process from beginning to end. Chances are that the interface is live for a select group of merchants that Google has selected as beta testers. The process for creating these offers will surely be very different from the system ClickZ describes in its article, however.

The “Offers” tab in the Google Places administrative interface for local merchants allows companies to show coupons on their place pages and on Google Maps. That’s it. You can find Google’s guidelines for these coupons here.

Maybe Google will use a similar interface for its Groupon clone – and chances are that this clone will also be available in the same interface. The current interface has been there for a long time, however, and unless Google was planning to clone Groupon before that company had ever launched, there is basically no connection here.

Groupon is the hottest thing on the Internet today. It doesn’t come as a surprise that Google is preparing to launch a Groupon clone of its own now after an unsuccessful attempt to buy the company outright – but maybe it should. After all, the daily deal market is already full of competitors in every possible niche and Google is only a few months late to the party. There was a time where Google was launching innovative products – now it’s just launching clones – and some of them, like Buzz, aren’t even able to make much of a dent in their market.

“Google is communicating with small businesses to enlist their support and participation in a test of a pre-paid offers/vouchers program. This initiative is part of an ongoing effort at Google to make new products, such as the recent Offer Ads beta, that connect businesses with customers in new ways. We do not have more details to share at this time, but will keep you posted.”

There is nothing new here, though. This is not a new way for businesses to connect with customers. Thanks to Groupon, LivingSocial and their plethora of clones, businesses have been doing this for years now. Judging from what we know about Google Offers, this will just be a straight up clone of Groupon (down to the pithy write-ups).

There is nothing innovative about Google Offers as far as I can see. It’s just the same old concept, with the same old deals. Makes you wonder if Google is losing its ability to innovate.

Can Google Succeed?

So what are Google’s chances to succeed in this market? On the plus side, Google can quickly hire enough sales personnel to sell these offers and its name should give it enough clout to sign up lots of local businesses. Google could also show a one-time message to all of its Gmail customers to sign up for this with one click and immediately get a few million subscribers – but that could also land the company in hot water.

On the other hand, though, if it only offers deals that are similar to Groupon, will users really want to sign up for yet another deal-of-the-day email?